Understanding Consumer Behavior :

Importance in Pharmaceutical Marketing

The consumer is considered king in today's scenario of marketing. Gone are the days when manufacturerscould have sold anything to the consumers. Henry Ford once famously said, "My customers can have a carof any colour as long as it is black". It Henry Ford had been born in today's world he would have definitelythought a several times before giving this statement. Now a days it is consumer whose buying preferencesdecide what should be manufactured, in what quantity and what should be the quality of the product. Thus ,a marketer has to take into account various factors while deciding on marketing a product as consumershave different preferences and some times totally diverse preferences. So the task of manufacture andmarketer becomes onerous and therefore it is very important to understand the consumer behavior.Understanding consumer behavior is still arduous in the field of pharmaceuticals as the target customer isnot the end user but the influencer i.e. the doctor who generates the prescription.

Consumer Behavior in Pharma Sector

Unlike direct ' seller to user sales' pharma selling is a multiple tier process. Here the consumer / user is notin direct contact with the salesman. Here the medical practitioner decides on the behalf of patient /consumer,which product needs to be bought, in what quantity, when to be consumed and how long to consume Fig.1.Hence, regular, continuous study of prescribing behavior of physicians is very important for pharmaceuticalmarketer.

Medical Practioner Influence Feedback Feedback Influence

Salesman Consumer

Buys Sells Sells Buys

From to to From

Sells to Sells to Distributor Wholesaler Retailer Buys from Buys from Fig. 1 . : The Distribution ChainNow, let us consider some of the facts pertaining to pharma sector and prescription pattern. 1. According to University of Arizona, 70% of all prescriptions are never consumed. 2. According to consumer health information, 20% of all the new prescriptions go unfilled. 3. WHO reported that half of all the patients do not adhere to their prescribed therapy?

What is Consumer Behavior ?

The term consumer behavior is defined as the behavior that consumers' display in searching for, purchasing,evaluating and dispensing of products and services that they expect will satisfy their needs.The behavioral sciences that have made significant contributions to the study of consumer behavior areeconomics, sociology, psychology, and to some degree political science and cultural anthropology. Themodem day marketing discussion centers around the need for modern marketing to be consumer orientedand to be concerned with the needs and wishes of the consumer and thus, studying consumer behavior iscritical, for companies, in getting success of the products in the market.

Consumer PyramidBefore we move further let us discuss the consumer pyramid. Which has been formed, on this basis ofconsumer behavior. This is a very efficient tool in the hand of the marketer to study consumer behavior evenmore closely. This pyramid has four tiers; 1. Platinum tier: It includes heavy users/prescribes who are not price sensitive and who are willing to try new offerings. 2. Gold tier: They are also heavy users but are more price sensitive. They ask for more discounts, free samples etc. and are likely to prescribe several brands. 3. Iron tier: It consists of customers whose spending volumes, profitability and prescribing pattern do not merit special treatment from the company. 4. Lead tier : It consists of customers who actually cost the company money because they claim more attention then is merited by their spending, tie up company resources and spread negative work of mouth.

The four tiers described above can be compared with traditional New Product Adoption Process as described in Fig. 2 . The first tier, the platinum tier can be compared with the "Innovators" as these customers are trying to experiment and accept new offering from the companies. The other tier i.e. gold tier can be compared with "Early adopters and Early majority" as these customers are responsible for growth phase of a product life cycle due to substantial use of the products. The third tier i.e. the iron tier can be compared with " Late Majority" who have adopted the product very late in the Product Life Cycle and are very cautious while using the products and the brands. And the last tier i.e. Lead tier can be match up with the "Laggards" who would hardly try the product and actually drains out the company's resources.

Fig. 2. : New Product Adoption Process

Factors Influencing Consumer Behavior

The various factors influencing consumer behavior are : 1. Cultural factors 2. Social factors 3. Personal factors 4. Psychological factors 5. Psychographic factorsCultural FactorsCulture is the fundamental determinant of a person's want and behavior. Companies often design specializedmarketing programs to serve each subculture. This programme is called diversity marketing.e,g. The people of Germany pronounce the letter 'V' as 'F' so while pronouncing work VICKS they call itFIX, rather than VICKS . Now , the marketing VICKS in Germany its name had to be changed to suit theGerman Culture.Indians are much more oriented towards Ayurvedic or Herbal medicines. It is in the Indian culture to useNeem. Tulsi, Haldi etc. So, it's much easier to position non - allopathic drugs in India because of its culturalset up.

Social FactorsThe social factors, which influence consumer behavior, areL i. Reference group ii. Family iii. Social status and role

Reference group " A reference group consists of all the groups that have a direct (face to face) or indirectinfluence on the person's attitudes or behavior. Now these reference groups have an opinion leader. They arethe persons who offer advice or information about a specific product or product category and suggest whichbrand is best. A marketer should know how to reach and influence these opinion leaders in order toinfluence consumer behavior. e.g. In pharmaceutical field while marketing a product, it is important toidentify certain key Opinion Leaders (KOL) who have influence on the prescription pattern of other doctorsin specific areas or have wider geographical reach. If these KOL's start prescribing the product, manydoctors also prescribe the product.

Family: Family is an important determinant of social factor. If there is a physician whose father is also aphysician it is natural that he will have a liking for the same drug that his father used to have.

Social status and role: The person's position is defined in terms of role and status. People choose productsthat communicate their role and status. A physician depending on its specialty, experience and social statuswill go for the drug that will match his social status. A well known renowned physician will surely go forthe branded drugs rather than generic drugs. Further prescribing pattern will also have influence dependingon the types of patient a doctor treats. For rich patients a doctor may prescribe costly products while for apoor patient he may not do so.

Personal FactorsThe various personal factors which influence consumer behavior are: i. Age and stage in the life cycle ii. Occupation and economic circumstances iii. Life Style iv. Personality and self concept

Age and stage in life cycle : The choice of product and brand differs with age. With the increase in age andexperience of physicians, their prescribing behavior changes. Younger physicians can easily go for newdrugs or brands. Whereas the experienced doctors mostly go for renowned, well established or well knowndrugs or brands. It may be easier to convince a younger doctor to try a new product or a brand as comparedto an experienced doctor.

Occupation and economic circumstances: It depends upon the specialty of the physicians. The determinantfactor is the place of work i.e. whether he works in a government hospital, general hospital, and privatehospital or in a private clinic.

Personality and self concept: Personality is the individual characteristic that makes a person unique as wellas consistent in adjustments to the changing environment. It is an integrated system that holds attitude,motivation and perception together. Further a doctor that has learnt in his early stages, for e.g. during studyor internship, is likely to be loyal to a particular brand rather than switching to other brand and companiesshould focus on developing a self concept among doctors about a company's products.

Motivation: A motive is an internal emerging force that orients a person's activities towards satisfying aneed or achieving a goal. The motives may be rational or non rational. e.g. rational motives for a doctor areprice, efficacy, patient compliance and economy of a medicine while prescribing. Non - rational areprestige, comfort and pleasure. Convenience is the factor which is both rational and non rational at the sametime. Motives often operate at subconscious level, hence are difficult to measure. Let us discuss an exampleto understand it better. Nutriment is a product marketed by Bristol - Meyers Squibb to be used as anadditional energy supply after exercise and play etc. as a fitness drink. But it was found that this productwas heavily used by drug addicts, as they were not able to digest a regular meal. So, the motivation topurchase nutriment was completely different from the thinking of the company.Perception: It is the process by which an individual selects, organizes and interprets information inputs tocreate a meaningful picture of the world. It varies from individual to individual. One doctor might perceive a fast talking medical representative as aggressive and insincere, anotheras intelligent and helpful. While prescribing a product one doctor may not feel so.Learning: Learning involves changes in an individual's behavior arising from experience. Learning reflectsand individual's capability to comprehend new things based on experience .It is important that doctors learnabout new products and new treatment therapy. Pharmaceutical companies have to make a doctor learnabout new therapy and treatment options by providing relevant literature and apprising doctors aboutadvances in pharmaceutical sciences. e.g. Biogen used multi paged advertorials to launch and position theirproduct called Amevine for treatment of psoriasis. They used the learning psychology of physicians toposition their product. e- detailing is a broad and continually evolving term describing the use of electronic,inter4active media to facilitate sales presentations to physicians. Some of the pharmaceutical companies areusing this method to communicate key marketing messages to physicians. But how many physicians want touse e-marketing as a learning tool also attributes the success of a pharmaceutical company in adopting newmethodologies of product promotion. If doctors are not willing to adapt to evolving techniques and so theefforts spent by a pharmaceutical company would go waste and thus understanding the learning curve ofcustomers is also important.

Belief and Attitude: A belief is a descriptive thought that a person holds about something. People's beliefabout a product or brand influences their buying and prescribing decisions. If a physician has belief in theproduct of one company, he will prescribe it in spite of equivalent products available from competitors.Customers begin service experiences with some level of trust, but the quality of the delivered servicedetermines whether the trust level rises or falls. The customer's confidence in the service is especiallyimportant in healthcare. " If a customer is unhappy with the service offered by the sales officer of onecompany, he is likely to have a negative view about the company.

Psychographic FactorIt is much more important to know what sort of patient has a disease that what sort of disease a person has.This is the kind of thinking a marketer needs to have while dealing with psychographic behavior of theconsumer.Psychography is the science of using psychology and demographics to better understand consumer behavior.Here marketers believe that positioning occurs not in the market place, but in the customer's mind.Psychographic studies are mainly based on VALS (Value, Attitudes and life Style survey). This VALSconsists of eight segments.Primary Motivation Ideals Achievements Self expression InnovationHigh Thinkers Achievers Expressions InnovatorsLow Believers Strivers Makers Survivors

This is done basically to break the market into meaningful places. internally homogenous but externallyheterogeneous.e.g. Johnson and Johnson has used psychographics to position its OTC analgesics, Mortin (for aggressivededicators) and Tylenol (for cautious ones)Buying Preferences of Indian consumersA promo survey conducted by Brand Equity has revealed the consumer buying behavior of the Indianconsumer. It is observed in the survey that majority of Indian consumers does shopping not because of theproduct but the purchase of a specific product offers them a chance to win great gifts. This survey wasparticularly carried out to find out the demand of particular brands, analyzing buying behavior, reasons thatdrive brand loyalty, preferences for promotion tools, participation mode and prizes." Although this kind ofsurvey may be hard to find in Indian context for the doctors while prescribing a product, it can be fairlyassumed that while prescribing a particular brand doctors are likely to prefer those brands that offers themtangible and intangible benefits attached to the brand. Tangible benefits are gifts, samples, participation inCME (Continuing Medical Education) or conferences etc. where as intangible benefits include patientcompliance, duration of therapy (generally duration of therapy should be short) effectiveness of the product,company image etc. A specific survey of this kind would throw the light on the prescription of doctor inIndia.Brand or Generic?This is the biggest doubt a physician has in his mind when he has to prescribe a medicine. The choicebetween a brand and a generic is always a difficult one. Generally marketers believe that there are twofactors which motivate the doctor to prescribe brand or generic drug: 1. Physicians evaluate the relative efficacy of brand name drugs and their generic substitutes and prescribe the brand name drugs when they are associated with therapeutic gains and outweigh their relatively higher cost to patient. 2. Physicians tend to prescribe brand name drugs, even without evidence of their therapeutic superiority, because neither they not their insured patients bear these drugs increased cost with respect to generic substitutes. If this hypothesis is true, moral hazard is evident in physicians prescribing behavior because they are little or no incentive to internalize the drug costs.